Carbon Tax and Oil Subsidies / Taxe Carbone et Subventions de Pétrole

The challenge of the 21st century is climate change. A tax regime to address it needs to be developed in an equitable manner. CCPA proposes imposing a tax of $30 a tonne rising to $50 a tonne by 2021. This would be progressive if half of the revenue obtained would be rebated to Canadians, and the other half invested in green technologies and a just transition program to retrain workers. The CCPA proposal would:

“…. introduce a national harmonized carbon tax that would be integrated with existing provincial carbon taxes to ensure a minimum rate starting at $30 per tonne across Canada….At least half the revenues generated would go towards a progressive green tax refund that would ensure a majority of Canadians would be better off after accounting for their increased costs as a result of the carbon tax. Every adult…. would receive an annual green refund cheque for $300 while children would receive $150…. The remaining revenues would be used to fund climate change…. measures, including investments in public transit, green energy, and energy retrofits for low-income households.” “The carbon tax,” the AFB says, “Would generate annual revenue of $16 billion. The Green Tax Refund would incur a net annual cost of $8.8 billion.”

Sweden, which has been successful in implementing a carbon tax, does it through the implementation of an excise tax on carbon-based fuels such as oil and gas. In 2012 its revenues from this source were 2.52% of GDP, set at a rate of $140.00 a tonne or a gas pump price of 2.34 kronor per litre. (Guardian April 2008) A review of Canada’s emissions target in 5 years would necessitate moving from $50.00 in 2021 to a target price of $200 per tonne by 2030. Sweden’s example shows that a high price does not impede economic growth, but leads to marked decreases in emissions. It is the course needed to meet the requirements of the Paris Climate Change Treaty recently ratified by the Justin Trudeau Liberal government.

The NDP should advocate a Carbon tax as proposed by the CCPA beginning at $30 and rising to $50.00 by 2021. In addition, the NDP should commit to ending oil subsidies. That would bring in $1.3 billion in revenues, and end public financing through the Export Development Corporation, which is estimated to cost $2.9 billion a year.